MICHAEL C. MILLER, PETITIONER V. UNITED STATES OF AMERICA
No. 87-1040
In the Supreme Court of the United States
October Term, 1987
On Petition for a Writ of Certiorari to the United States Court of
Appeals for the Ninth Circuit
Brief for the United States in Opposition
TABLE OF CONTENTS
Questions presented
Opinion below
Jurisdiction
Statement
Argument
Conclusion
OPINION BELOW
The opinion of the court of appeals (Pet. App. A1-A10) is reported
at 830 F.2d 1073.
JURISDICTION
The judgment of the court of appeals was entered on October 22,
1987. The petition for a writ of certiorari was filed on December 21,
1987. The jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).
QUESTIONS PRESENTED
1. Whether the district court properly applied 18 U.S.C. (Supp. IV)
3292 to suspend the statute of limitations when the underlying
criminal conduct took place before Section 3292 became effective.
2. Whether 18 U.S.C. (Supp. IV) 3505, which permits the
authenticity and reliability of foreign business records to be
established through a certification completed by the foreign
recordkeeper and executed under penalty of perjury, violates the
Confrontation Clause of the Sixth Amendment.
STATEMENT
On April 3, 1986, petitioner was indicted by a grand jury sitting
in the Central District of California. The indictment alleged that
petitioner obtained $1,135,533 by fraud and that he laundered the
money through banks in the United States, the Cayman Islands, Austria,
and Switzerland. He was charged with wire fraud (18 U.S.C. 1343), two
counts of mail fraud (18 U.S.C. 1341), and transportation in foreign
commerce of property taken by fraud (18 U.S.C. 2314). On a
conditional plea of guilty, petitioner was convicted of wire fraud.
He was sentenced to two years' imprisonment and was ordered to pay
restitution of $1,135,533. The court of appeals affirmed (Pet. App.
A1-A10).
1. In 1978, petitioner befriended John Louis Paanakker, a 21-year
old man who had recently moved from Germany to California. Paanakker
was about to receive a large inheritance in stocks, and petitioner
persuaded him to invest the inheritance in the Cayman Islands. In
July 1980, petitioner traveled to the Cayman Islands and set up a
company called Humberstone, Hatfield & Co., Inc. He also opened a
company account at the Bank of Nova Scotia over which both he and
Paanakker would have authority. Petitioner told Paanakker, however,
that Paanakker would be the only person authorized to withdraw money
from the account. Pet. App. A3.
In September 1980, Paanaker sold his inherited stock and received
$1,135,533 for it. Paanakker then gave petitioner a check in that
amount drawn in favor of the Humberstone company. Petitioner later
assured Paanakker that he had wired the money to the Humberstone bank
account, and he represented that bearer bonds had been purchased with
the money. In fact, no bearer bonds were purchased, and Paanakker's
money was never deposited in the company account. Instead, in early
October 1980, petitioner sent a cable to Barclays Bank International
in the Cayman Islands transmitting the $1,135,523 to his own account.
He then instructed Barclays Bank to transfer the money to his personal
account at a bank in Austria. At petitioner's direction, the money
was then transferred again to his accounts at two different banks in
Switzerland. In December 1980, petitioner told Paanakker that he had
received the bearer bonds, but that the bonds had been stolen when his
house was burglarized. As a result, petitioner said, Paanaker had
lost his inheritance. Pet. App. A4.
2. After Paanakker reported his suspicions to the FBI in 1982, a
grand jury began investigating the transactions. On September 9,
1983, the government made an official request for the records of the
Bank of Nova Scotia and Barclays Bank International in the Cayman
Islands. That request was granted five months later on February 13,
1984. Based on information revealed by those records, the government
then asked for the records of the Austrian bank on July 25, 1984.
That request was granted four months later on November 28, 1984, and
the records were received on December 26, 1984. Based on the
information in those records, the government requested the records of
the Swiss bank on February 25, 1985. Six months later, on August 26,
1985, that request was granted. Pet. App. A4.
On the government's application, the district court entered an
order on July 17, 1985, suspending the statute of limitations under 18
U.S.C. (Supp. IV) 3292 for the nine-month period during which the
official requests for the bank records in the Cayman Islands and
Austria had been pending. On November 20, 1985, the district court
granted the government's application for another suspension of the
statute of limitations for the six-month period during which the
request for the bank records in Switzerland had been pending. The
grand jury returned its indictment less than five months later on
April 3, 1986. Pet. App. A4-A5.
3. After petitioner was indicted, the government notified him that
it intended to offer the foreign business records in evidence at trial
pursuant to 18 U.S.C. (Supp. IV) 3505. Petitioner moved to exclude
the evidence and to dismiss the indictment on the ground that it was
barred by the five-year statute of limitations, 18 U.S.C. 3282. When
the district court denied both motions, petitioner entered his
conditional guilty plea, reserving the right to challenge the district
court's rulings. Pet. App. A5.
4. The court of appeals affirmed (Pet. App. A1-A10). The court
first rejected (id. at A5-A6) petitioner's argument that the district
court improperly suspended the statute of limitations by applying 18
U.S.C. (Supp. IV) 3292 retroactively. It observed (Pet. App. A5) that
Section 3292 was enacted as part of the Comprehensive Crime Control
Act of 1984 and became effective on November 12, 1984. See 18 U.S.C.
(Supp. IV) 3292 note. The court then determined that the tolling
provision of the statute "was not applied * * * retroactively,"
because Section 3292 "was in effect when the district court orders
were entered suspending the statute of limitation" (Pet. App. A5-A6).
Relying on Bradley v. Richmond School Bd., 416 U.S. 696 (1974), the
court of appeals explained that "(t)he district court simply applied
the law in force" (Pet. App. A6).
The court of appeals also rejected (Pet. App. A7-A10) petitioner's
Confrontation Clause attack on the constitutionality of 18 U.S.C.
(Supp. IV) 3505, which provides that foreign business records shall
not be excluded as evidence by the hearsay rule if the records are
accompanied by a specified foreign certification. The court observed
(Pet. App. A9) that the Confrontation Clause does not require the
exclusion of hearsay of an unavailable declarant if the hearsay bears
"indicia of reliability." The court also noted (Pet. App. A9-A10) that
all the foreign bank records at issue were accompanied by statements
and attestations from bank employees sufficient to indicate their
reliability. The court further observed (id. at A10) that the
admission of business records is one of the firmly rooted exceptions
to the hearsay rule that does not offend the Confrontation Clause.
The court of appeals pointed out (Pet. App. A10) that "(t)he
novelty of (Section 3505) is to admit the records without
confrontation by the defendant with the recordkeepers." It noted
(ibid.) that "(n)o motive is suggested that would lead bank officials
to change, distort, or manipulate the records at issue here." The
court went on to conclude (ibid.) that the application of Section 3505
to the bank records in this case would not run afoul of the
Confrontation Clause because "(t)he recordkeepers have, under criminal
penalties in their own countries, asserted that the records are
records kept in the course of business" and, "(i)f the records were in
fact inaccurate, it was within (petitioner's) power to depose the
recordkeepers and challenge the records."
ARGUMENT
1. Petitioner first renews his contention (Pet. 7-15) that the
district court erred by applying 18 U.S.C. (Supp. IV) 3292 to suspend
the five-year statute of limitations set forth in 18 U.S.C. 3282. The
court of appeals correctly rejected that contention, and its decision
does not conflict with any decision of this Court or another court of
appeals.
There is no merit to petitioner's argument that the suspension
provisions of 18 U.S.C. (Supp. IV) 3292 do not apply if the underlying
criminal acts took place before the effective date of Section 3292.
In Bradley v. Richmond School Bd., 416 U.S. 696 (1974), the Court
reaffirmed the long-standing principle "that a court is to apply the
law in effect at the time it renders its decision, unless doing so
would result in manifest injustice or there is a statutory direction
or legislative history to the contrary" (id. at 711). As the court of
appeals observed, that is what the district court did when it applied
Section 3292 to suspend the statute of limitations in this case: it
"simply applied the law in force" (Pet. App. A6). It did not apply
Section 3292 "retroactively" (id. at A5).
Petitioner mistakenly relies (Pet. 7-8, 9) on the general "policy
of repose" reflected in the statute of limitations to override the
elementary principle that a new law is fully applicable after its
effective date in the absence of legislative direction to the
contrary. To be sure, the function of a statute of limitations "is to
limit (an individual's) exposure to criminal prosecution to a certain
fixed period of time following the occurrence of those acts the
legislature has decided to punish by criminal sanctions." Toussie v.
United States, 397 U.S. 112, 114 (1970). It is well established,
however, that Congress may modify or extend a statute of limitations
without violating the Ex Post Facto Clause, because changes in a
statute of limitations are mere procedural changes. See United States
ex rel. Massarella v. Elrod, 682 F.2d 688, 689 (7th Cir. 1982), cert.
denied, 460 U.S. 1037 (1983); Clements v. United States, 266 F.2d
397, 399 (9th Cir.), cert. denied, 359 U.S. 985 (1959); Falter v.
United States, 23 F.2d 420, 425-426 (2d Cir.) (Learned Hand, J.),
cert. denied, 277 U.S. 590 (1928). /1/ Likewise, Congress can enact
legislation that allows a court to suspend a statute of limitations
for both pending and future cases. That is what Congress did here.
Petitioner mistakenly contends (Pet. 10, 13) that Section 3292 may
not be applied to pending cases involving criminal conduct occurring
before that section's effective date, in the absence of an expression
of congressional intent that it be so applied. /2/ To the contrary,
this Court's decision in Bradley soundly "reject(ed) the contention
that a change in the law is to be given effect in a pending case only
where that is the clear and state intention of the legislature" (416
U.S. at 715 (footnote omitted)). Indeed, the Court made it plain that
the rule is just the opposite: "a court is to apply the law in effect
at the time it renders its decision, unless * * * there is statutory
direction or legislative history to the contrary" (id. at 711). /3/
And as petitioner concedes (Pet. 10), the legislative history does not
in any way indicate that Congress intended Section 3292 to be
inapplicable to cases involving criminal conduct occurring before the
date of its enactment.
Petitioner suggests (Pet. 13-15) that the court of appeals'
decision conflicts with United States v. Richardson 393 F. Supp. 83
(W.D. Pa. 1974), aff'd, 512 F.2d 105 (3d Cir. 1975). There is, in
fact, no direct conflict. In Richardson, the Third Circuit affirmed
the district court's conclusion that a new law changing the
commencement date of the statute of limitations for failing to
register with the Selective Service System (50 U.S.C. App. 462(d)),
was not intended to be applied to offenses committed before the law's
effective date. The question decided in the Richardson case involved
a different statute and thus is only indirectly relevant to the proper
interpretation of 18 U.S.C. (Supp. IV) 3292. In any event,
Richardson's reasoning is at odds with the principles recognized by
this Court in Bradley. In Richardson, the Third Circuit relied on
Congress's silence to create a presumption that Congress did not
intend the new law to apply when the offense occurred before the Act's
effective date (512 F.2d at 106). The court neither mentioned nor
attempted to reconcile that conclusion with Bradley. Instead, the
court simply relied on the general proposition that a law is presumed
to operate prospectively unless there is a clear indication to the
contrary (ibid.), without explaining how the application of a new
statute of limitations to a pending case -- a prospective application
of the law -- runs afoul of that proposition.
2. Petitioner also renews his contention (Pet. 15-24) that 18
U.S.C. (Supp. IV) 3505 violates the Confrontation Clause because the
custodian who provides the certification for foreign business records
is not subject to cross-examination. That contention is meritless.
Section 3505 was enacted in response to the difficulties
encountered by the government in securing the admission of foreign
business records at trial. Because the custodians of such records
generally are not subject to subpoena, prosecutors cannot compel their
presence at trial to authenticate and provide foundational testimony
for the admission of foreign records. See Fed. R. Crim. P. 17(e)(2).
Prior to the enactment of Section 3505, prosecutors were thus forced
to take the depositions of foreign custodians under Fed. R. Crim. P.
15 to authenticate foreign records. The deposition procedure, which
is dependent upon the consent of the foreign government, was
time-consuming and very costly.
Contrary to petitioner's contention (Pet. 21-23), Congress's
elimination of Section 3505 of a face-to-face confrontation with the
custodian of the records due to a perceived need to reduce costs and
minimize inconvenience does not render Section 3505 constitutionally
infirm. It is well established that the admission at trial of hearsay
statements of an unavailable declarant does not offend the
Confrontation Clause if the out-of-court statements bear sufficient
"indicia of reliability" to assure an adequate basis for evaluating
the truth of the declaration. Bourjaily v. United States, No. 85-6725
(June 23, 1987), slip op. 10; Ohio v. Roberts, 448 U.S. 56, 65-66
(1980); Dutton v. Evans, 400 U.S. 74, 83-90 (1970). In enacting
Section 3505, Congress carefully protected the rights of criminal
defendants under the Confrontation Clause by imposing requirements to
ensure the admission of only demonstrably reliable evidence. See H.R.
Rep. 98-907, 98th Cong., 2d Sess. 3-4 (1984).
As the court of appeals correctly concluded (Pet. App. A7-A10), the
custodian's certification under 18 U.S.C. (Supp. IV) 3505 for the
admission of foreign business records is sufficiently reliable to pass
constitutional muster. Section 3505 requires that foreign business
records be authenticated by a custodian of the records or other
qualified person. The certification must be executed under
circumstances that would expose the maker to criminal penalties if it
were falsely made. The certification must also establish that the
records are originals or duplicates of original records, and it must
establish that the records are business records within the meaning of
Fed. R. Evid. 803(6). Finally, Section 3505 provides that the
certified records are not admissible if the source of information or
the method or circumstances of their preparation indicate a lack of
trustworthiness. And, as the court of appeals pointed out (Pet. App.
A10), it is within a defendant's power to depose the recordkeeper to
challenge the accuracy of the records. Accordingly, the custodian's
certification under Section 3505 provides sufficient guarantees of
reliability to satisfy the Confrontation Clause. Cf. United States v.
Davis, 767 F.2d 1025, 1031-1032 (2d Cir. 1985); United States v.
Leal, 509 F.2d 122, 127 (9th Cir. 1975).
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
CHARLES FRIED
Solicitor General
JOHN C. KEENEY
Acting Assistant Attorney General
JOSEPH C. WYDERKO
Attorney
APRIL 1988
/1/ For example, in Clements v. United States, supra, the court
rejected the notion that the application of a new statute of
limitations to past offenses is, in all instances, a retroactive
application of the law. The court held that there was no Ex Post
Facto Clause violation because the "amendment was not retroactive in
substance or effect" when applied to crimes that were not already
time-barred when the law went into effect. 266 F.2d at 399. The
court reasoned that because an indictment could have been validly
returned at the time the amendment was passed, an extension of the
limitations period for the same offense could not be deemed a
retroactive law (ibid.).
/2/ Petitioner has never claimed that the suspension provision of
Section 3292 violates the Ex Post Facto Clause. Indeed, he conceded
before the court of appeals that the issue here is purely a matter of
statutory construction: whether Congress intended that Section 3292
be applied to cases where the criminal conduct occurred before the
section's effective date. Appellant C.A. Br. 14; Appellant C.A.
Reply Br. 4 n.2.
/3/ Accordingly, the court of appeals' observation that Section
3292 "was in effect" when the suspension orders were entered does not
beg the question, as petitioner argues (Pet. 11). To be sure, the
ultimate issue is whether Congress intended Section 3292 to apply in
all cases after the effective date of the section. But as the Court
made clear in Bradley, a statute is to be applied in all such cases
unless Congress manifests a contrary intention.